The Hunting Ground, a documentary about sexual assault on college campuses, opened recently across the country. I saw the film in a commercial theater on opening weekend in Tallahassee. Alone. At least at the beginning. I was joined by one other woman and a couple by the time the opening credits flashed on the screen. This is unfortunate because campus sexual assault may be one of our society’s most significant contemporary examples of the failure of civil society, and hundreds of thousands of women and men have suffered as a result.

I doubt the filmmakers had this insight in mind when they conceived, filmed, and rolled out the marketing for the film. They have said that their main goal is to create a “conversation” on campus rape. The film is much more pointed than that, and the filmmakers clearly have an agenda, but its power is in using rape survivor testimony to strip away any pretence that sexual assault on college campuses is somehow exceptional. It’s not. Almost every student will know someone who has been sexually assaulted by the time they graduate (although most will not have experienced it directly themselves). And this is a failure of civil society on our campuses.

The film itself, like many documentaries, is a call to action. Their goal is to use the injustice of sexual assault to provoke advocacy. The use of two rape survivors and activists from the University of North Carolina at Chapel Hill—Andrea Pino and Annie Clark—as the primary vehicle for telling the story is both effective and important. These young women, facing intransigence, impotent administrators, and bureaucratic stonewalling, launched the initial efforts that led to the tidal wave of Title IX investigations now forcing college and university administrations to address sexual assault more forthrightly.

Opposition to the outrageous so-called Medicare doc fix bill, which will increase the federal deficit by $141 billion, is growing. Michael Cannon of the Cato Institute explains how this will “bust the budget.” My Forbes editor, Avik Roy, pleads that the Senate stop this monstrosity (which passed the House by a huge majority).

On the other hand, there are those unfortunate conservatives who endorsed the bill before they had read it, and before the Congressional Budget Office had announced what a budget buster it was. My friend Ryan Ellis of Americans for Tax Reform appreciates that the CBO score could give us a feeling of “whiplash”. However, he explains:

Let’s start with the CBO score. Under a “current law” baseline (wherein CBO assumes that physician reimbursements will be cut 21 percent next week and stay cut forever), H.R. 2 is a ten-year spending increase of $141 billion, because the law would do away with that 21 percent cut and the government would have to pay doctors more. Under a more realistic baseline in which doctors don’t face a 21 percent Medicare cut next week (or ever), H.R. 2 is a ten-year spending cut of $1 billion. That’s because in this scenario, elimination of the 21 percent cut is already included in the baseline, so it doesn’t count as new spending. So it really comes down to deciding which starting point (another term for baseline) you think is more reasonable. I think the more reasonable starting point is that Congress won’t let next week’s 21 percent reimbursement cut happen (a safe bet, since they’ve avoided it 17 times since 2003).

Oakland’s voters who approved the March 1 increase of the minimum wage to $12.25 apparently drank the Kool-aid that it would “help the poor.” Tell that to the working poor parents who will now be scrambling to find good, affordable child care:

Workers who benefit from Oakland’s minimum wage hike might soon lose a service that enables them to work in the first place. It turns out the well-intentioned law is putting a financial squeeze on Oakland’s child care industry, leading some providers to panic.

“Panic” may help sell newspapers, but those who have to keep their doors open deal more in Cold Hard Facts:

Revenues < Expenses = Bankruptcy

So when its main expense (labor) increases by more than 36% overnight (from $9 to $12.25 per hour), Cold Hard Facts say: Increase Revenues or Decrease Expenses.

For a non-profit early childhood development center in Oakland which had recently garnered the highest rating in the county, the only way “out” is decreased costs. Parents of the 63 children cared for there—all working poor—pay little to nothing for the care provided five days a week, every week of the year. Because it is a nourishing environment—providing professional care, guided recreation, stories, socialization and pre-school instruction—it is by definition very labor intensive. And much of that labor is provided by minimum-wage teachers’ aids. The immediate, first-year budget shortfall to meet the mandated wage increase: $146,500

But it’s really more than that: in practice, a rise in the minimum wage puts upward pressure on the pay of those employees who had been earning above minimum wage, but whose relatively higher pay has now disappeared with the mandated minimum-wage increase—so the amount needed to keep everyone equal “relatively” is actually closer to $200,000.

Unfortunately, as a non-profit, it can’t raise “prices” and it doesn’t have an angel it can tap to write a check, so cuts are the reality to keep the doors open.

Infant care, which demands a higher teacher:child ratio, will be discontinued, and staff let go accordingly.

Bottom line: the elimination of care for 11 infants of the working poor, and the jobs of three teacher aids.

This means working poor parents of infants in Oakland now have fewer sources for their care, with higher costs. And three formerly minimum-wage workers are now unemployed.

And that’s just one childcare center. The story is similar across the sector, as reported by the San Francisco Chronicle. Will parents be able to re-juggle their household budgets and work schedules to ensure their children are well cared for while they work?

San Francisco also raised its minimum wage, and on both sides of the bay the immediate effect has been the close of a popular science fiction bookstore, restaurants—from highest rated to humble Chinatown establishments—and worsened job prospects for youth.

In any case, it’s time to wake up and face reality: raising the minimum wage is a lousy way to “help the poor.” As noted here:

…minimum-wage workers are typically not in low-income families; instead they are dispersed evenly among families rich, middle-class and poor.

Virtually as much of the additional earnings of minimum-wage workers went to the highest-income families as to the lowest. Moreover, only about $1 in $5 of the addition went to families with children supported by low-wage earnings. As many economists already have noted, raising the minimum wage is at best a scattershot approach to raising the income of poor families.

Yesterday’s Health Alert warned against the so-called Medicare doc fix that is being jammed through the Congress this week. More voices are rising up against this flawed legislation.

The Health Alert was written and published before the Congressional Budget Office published its estimate of the bill’s effect on the deficit. Here it is:

Over the 2015–2025 period, CBO estimates, enacting H.R. 2 would increase both direct spending (by about $145 billion) and revenues (by about $4 billion), resulting in a $141 billion increase in federal budget deficits (see table on page 2). Although the legislation would affect direct spending and revenues, it would waive the pay-as-you-go procedures that otherwise apply.

When a leading benefits consultant writes an article in the Harvard Business Review recommending that health plans cover yoga, it should be glaringly apparent that we have perverse incentives in U.S. health benefits:

Cigna insurance CEO David Cordani says the Centers for Medicaid and Medicare Services’ recent payment changes that emphasize quality over quantity in healthcare will shift the focus on “sick care to more well care.” But a widespread embrace of diet, fitness and other wellness programs is still a way off….

Upon watching the first session of women’s Olympic boxing in London in 2012, leading neuroscientist John Hardy stated that,

We shouldn’t get our fun out of watching people inflict brain damage on each other. To me as a neurologist it’s almost surreal.

Indeed, boxing has a reputation for producing some real medical nightmares. Having an ear bitten off by Mike Tyson might be the least of a boxer’s problems. The force of a professional boxer’s fist is equivalent to that of a 13 pound bowling ball traveling some 20 miles per hour. While blows to the body aren’t likely to feel particularly good, it’s shots to the head that doctors find most concerning. It doesn’t take a rocket scientist to realize that repeated blows to the head aren’t a good thing.

Indeed, taking punches of this caliber to the face and head can have some truly nasty impacts. Studies have found between 15 and 40 percent of ex-boxers have some symptom(s) of traumatic brain injury (TBI). Speech difficulty, neck and muscle stiffness, memory loss, and other psychological problems have been reported and characterize what’s known as “punch drunk syndrome” or dementia pugilistica. Boxing has also been linked to other brain-related illnesses. Muhammed Ali, arguably the word’s most famous boxer has long suffered from Parkinson’s disease. His doctors have attributed this to his boxing career.

Boxing is not the only sport in which TBI is likely. Mixed Martial Arts (MMA), football, cheerleading, and soccer have all come under scrutiny due to rate of head injuries among professional and amateur players.

Source: American Journal of Sports Medicine

This past July, California governor Jerry Brown signed into law a bill prohibiting middle and high school football teams from holding full-contact practices more than twice a week, limiting the duration of said practices, and prohibiting full-contact practices outright during the off season.

While such stories have received significant attention. Nothing quite compares to what’s been said about boxing. People have likened the sport to human cock fighting. It is argued that the sport is comparatively more dangerous than others and that boxing exploits individuals who often hail from poor or otherwise disadvantaged backgrounds. A variety of changes have been proposed, from requiring protective gear, to banning blows to the head, to outlawing the sport outright.

Simply put, banning boxing is paternalism writ large. These policies, like the ones placing bans on football practices is a breeding ground for “big brother” to stick his finger in someone else’s business. Moreover, such bans would likely make the sport more dangerous, not less.

The fact is, no one is forcing a boxer to get into the ring. Saying that a boxer “doesn’t know the risk” or “can’t understand” is insulting their intelligence. In reality, boxers know full well what they are doing and have determined that the risk is worth the possible rewards. In some cases, the payoffs are huge. For example, professional boxer Floyd Mayweather has cashed checks of at least $25 million for each of his fights going back to 2007. Since 1996, he’s earned some $400 million. According to Forbes, Mayweather brought in some $105 million for 72 minutes of ring time in 2014. If you break that down, Mayweather earns him some $1,458,333 for every minute he spends in the ring!

Many would say that not all boxers earn such large returns. While certainly true, consider that the sport offers opportunities for many to get out of precarious situations. Manny Pacquiao, widely considered one of the world’s best boxers, for example, was born in utter poverty in the Philippines. Boxing provided him, and others, a way out of poor financial circumstances. Given the opportunity of participating in a dangerous sport and possibly improving their quality of life, they’ve decided it’s worth it. Banning boxing would shut the doors on such options.

What those who call for bans on boxing also seem to forget is that those in charge of boxing work to make the sport as safe as possible. Amateur boxers frequently don headgear and other padding in addition to their gloves. Watch any match on TV and you’ll notice medical staff must be present at every match. The ringside doctor or the referee can (and do) end a bought if they feel a boxer’s health is in danger. Boxers are also put in different weight classes (lightweight, middleweight, heavyweight, etc.). This not only makes fights more interesting with more equally matched fighters, but also significantly decreases the rate of injury.

Banning boxing would have further consequences. Just as banning drugs or prostitution doesn’t eliminate those activities, a ban on boxing or severe regulations wouldn’t end the sport. Instead, such actions are likely to drive the sport into an underground black market. Instead of occurring in a ring in Las Vegas, we’d see boxing in underground clubs. Unlike current fights with medical personnel, referees, and boxing gloves, we’d see bouts with (comparatively more dangerous) bare fists, fighters knocked unconscious, and higher rates of injury. While we can likely all appreciate the desire to increase the safety of athletes, whether boxing, football, or another sport, heavy regulations or banning the events are likely to fail in achieving the stated goals and result in perverse outcomes.

I learned a lot about miracles recently thanks to a penetrating sermon by pastor Mark McNees of Element3 Church, a “progressive” non-denominational church in Tallahassee. And it prompted a lot of thinking about markets and entrepreneurship, particularly entrepreneurship as conceived by Austrian economists, most notably Israel Kirzner. (Kirzner is required reading in my social entrepreneurship seminar at Florida State University.) It also happens to be the conceptual foundation for my novel St. Nic, Inc. which uses a Hayekian and Kirznerian framework to show in the context of a re-imagined Santa Claus allegory on how markets and entrepreneurs benefit society and what happens when bureaucrats don’t understand them.

The point of this post is not to evangelize Christianity. But McNees’ sermon provided a layered approach to understanding the “miracle” of modern entrepreneurship using a biblical context and then demonstrating a real-world application (although I’m not sure he would characterize it in this way). So it would be both disingenuous and inaccurate to relate the insight I gleaned, which is quite secular, without it. McNees was discussing the miracle of Jesus feeding 4,000 people (Matt 15:32-39). For days, Jesus healed the lame, the crippled, the blind, the mute and others. Then he realized that all these thousands didn’t have enough to eat. His disciples asked Jesus where they would get enough food to feed them. Jesus replied: “How much bread do you have?” The disciples said seven loaves and some small fish. Hardly enough to feed them let alone thousands, right? Well Jesus takes the bread and begins breaking it up until the thousands are fed and they have more than enough. Pretty fantastical from a conventional western rationalist perspective. In fact, many people use these kinds of biblical stories to demonstrate the implausibility and irrationality of religion and Christianity specifically.

But here’s the rub: Entrepreneurs perform these “miracles” every day in the real world. This is what entrepreneurs and innovators do. They identify–“discover”–opportunities and bring resources to bear on solving practical problems in ways no one else thinks could be done. The disciples didn’t believe that seven loaves of bread and a few fish could feed thousands. That’s what people tell entrepreneurs all the the time: they don’t have the knowledge, the resources, the money, the expertise, the access to markets for their vision–whether a product or service–to become reality. Entrepreneurs take a loaf of bread and figure out a way to make it feed thousands and make the world a better place.

McNees didn’t use this economic framework explicitly, but his illustration of a modern-day miracle was an allegory for this kind of entrepreneurship. Two years ago, McNees and members of Element3 church met a boy in Haiti, Jovens, without functioning legs in the slum of the poorest city in the poorest country in the Western Hemisphere. The boy’s plight touched him deeply, and he vowed (he was “called”) to do something about this child’s situation (in addition to all the other work Element3 was doing in Haiti, Central America, and Tallahassee). He didn’t know how he would do it–after all, he’s just a pastor, not a doctor, not a surgeon, not a prosthetic designer or manufacturer, and not a wealthy philanthropist–but he determined to make it happen. He had a vision for Jovens. For two years, he worked with members of the church, tapped into his network in Tallahassee and the nation, and identified new resources to make it happen. Last week, Jovens, the boy without legs, was walking for the first time in his life using a US manufactured, customized prosthetic leg. He was playing basketball, and even danced. He was smiling for the first time anyone could remember. (Here is a short video of Jovens’ miracle.)

Is Jovens’ leg a miracle? Yes, by any reasonable definition. Jovens’ life was transformed in a way he, his family, or his community had never had envisioned, let alone contemplated. Yet, now, the crippled boy can walk. His community was transformed by the commitment of a man and a church in Tallahassee. For the church, hundreds of individuals were inspired by the power of one person to change the world for the better. And they had no idea how it would happen when they took on their mission. So, yes, in all the practical meanings of the word, this was a miracle. It was also entrepreneurship–seeing the possibility of what could be done with a grander vision and faith in the individual, as opposed to limiting oneself to what exists and what can be seen today.

But this story is about more than one boy or one pastor or even one Church. This is the kind of vision, commitment and faith that drives individuals of all types to make the world a better place. This is the core of entrepreneurship and innovation as conceived by Israel Kirzner and made possible by civil society and Hayekian spontaneous order. These are the concepts that inspired my novel St. Nic, Inc., which uses the same framework to show, in a practical way, how a billion dollar global enterprise could in fact provide toys to millions of children through the “miracle” of the market, spontaneous order, and Kirznerian entrepreneurship.

This kind of entrepreneurship is also what inspires many Millennials, and I see this in my seminar on social entrepreneurship. They want to make miracles happen. We use the framework of market-based entrepreneurship to show students how to embrace their visions for improving the world and commit themselves to creating their own miracles. My students can take their time and ambition and create business plans with the potential to lift up scores, dozens, and even hundreds of people without resources or networks that no one knew existed or be created. This is the fundamental nature of spontaneous order, the essence of the discovery process identified by Kirzner in his classic book Competition and Entrepreneurship.

So, yes, miracles exist, and entrepreneurs are the ones who make them happen.

How big is government in the United States? The answer depends on the concept used to define its size. Although many such concepts are available, and several are used from time to time, by far the most common measure, especially in studies by economists, is total government spending (G) as a percentage of the gross domestic product (GDP).

Using official data available at the online repository maintained by the Federal Reserve Bank of St. Louis and data available online for the Bureau of Economic Analysis’s National Income and Product Accounts, I have calculated that for the five-year period 2010-14, this measure of the size of government—including all levels of government, not simply the federal government, and all types of spending, not simply purchases of currently produced goods and services—was 35.8 percent.

On reflection, however, one might well wonder why G has been “normalized” so often by measuring it relative to GDP. One reason this practice is questionable is that GDP includes a large part—equal in recent years to about 10 percent of the total—known as the capital consumption allowance. This is an estimate of the amount of spending that was required simply to maintain the value of the nation’s capital stock as it depreciated because of wear and tear and obsolescence. Given that GDP is defined to include only “final” goods and services, it is questionable that expenditures made solely to maintain the capital stock should be included at all, rather than excluded as “intermediate goods,” as a large volume of the economy’s total output is already excluded (e.g., steel sold the manufacturers of machinery, wheat sold to flour mills).

The Washington Times has an interesting article on the division among Republicans on patent reform. According to the article:

Two dozen prominent conservative political groups, led by the influential American Conservative Union, the Club for Growth and the Eagle Forum, sent a letter Wednesday to House Speaker John A. Boehner, Senate Majority Leader Mitch McConnell and the Democratic leadership seeking to block floor votes on the so-called Innovation Act.

The bill is being shepherded through Congress by Republican Reps. Robert W. Goodlatte of Virginia, chairman of the House Judiciary Committee, and Darrell Issa of California to reform patent laws and diminish the rise of “patent troll” lawsuits in which parties seek to win money for infringements of obscure patents.

Republicans are split on the evil of patent trolls. As supporters of private property, many have trouble taking shots at the trolls when trolls acquire patents by purchase, not fraud, and simply use the court system to “protect” patent rights. Unfortunately, this is an oversimplification.

The body of evidence that prices for medical and hospital treatment in the United States are all over the map is growing:

UCLA researchers have for the first time described cost across an entire care process for a common condition called benign prostate hyperplasia (BPH) using time-driven activity-based costing. They found a 400 percent discrepancy between the least and most expensive ways to treat the condition.

The finding takes on even further importance as there isn’t any proven difference in outcomes between the lower and higher cost treatments, said study first author Dr. Alan Kaplan, a resident physician in the UCLA Department of Urology.

“The rising cost of health care is unsustainable, and a big part of the problem is that health systems, health care providers and policy makers have a poor understanding of how much health care really costs,” Kaplan said. “Until this is well understood, taxpayers, insurers and patients alike will continue to bear the burden of soaring health care costs.” (UCLA Health)

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